1. The Six-Column Worksheet
Chapter 8

2. Preparing The Worksheet
Work sheet– a working paper used to collect information from the ledger accounts in one place.
Will be used later to prepare financial statements
Work Sheet Sections
Heading
Account Name
Trial Balance
Income Statement
Balance Sheet

3. Preparing the Worksheet
Ruling – drawing a line.
Trial Balance Section
Debits = Credits
Identical numbers from ledger and trial balance

4. Completing the Work Sheet
Matching Principle – requires matching expenses from an accounting period with the revenue from the same accounting period
Net Income – The amount of revenue that remains after expenses for the period have been subtracted
Net Loss – Occurs when expenses > revenue

5. Completing the Work Sheet
Write the heading
Account Name Section – Names, Numbers, Balances
Trial Balance Section – Prove Debits = Credits
Extend the amounts to the appropriate section
Income Statement for temporary accounts
Balance Sheet for permanent accounts
Of course there is an exception - Withdrawals

6. Completing the Work Sheet
Total Income Stmt and Balance Sheet columns
Determine Net Income (Loss)
Enter amount of net income in appropriate columns
Total and Rule